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Industrial Relations Policy in India Industrial Relations
Prepared By
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Manu Melwin JoyAssistant Professor
Ilahia School of Management Studies
Kerala, India.Phone – 9744551114
Mail – [email protected]
Industrial Relations Policy in India
• Prior to 1991, the industrial relations system
in India sought to control conflicts and
disputes through excessive labor legislation.
These labor laws were protective in nature
and covered a wide range of aspects of
workplace industrial relations like laws on
health and safety of labors, layoffs and
retrenchment policies, industrial disputes and
the like.
Industrial Relations Policy in India
• The basic purpose of these laws was
to protect labors. However, these
protectionist policies created an
atmosphere that led to increased
inefficiency in firms, over
employment and inability to
introduce efficacy.
Industrial Relations Policy in India
• With the coming of globalization, the
40 year old policy of protectionism
proved inadequate for Indian industry
to remain competitive as the lack of
flexibility posed a serious threat to
manufacturers because they had to
compete in the international market.
Industrial Relations Policy in India
• With the advent of liberalization in 1992,
the industrial relations policy began to
change. Now, the policy was tilted
towards employers. Employers opted for
workforce reduction, introduced policies
of voluntary retirement schemes and
flexibility in workplace also increased.
Industrial Relations Policy in India
• Thus, globalization brought
major changes in IR policy
in India. The changes can be
summarized as follows:
Industrial Relations Policy in India
• Collective bargaining in India
has mostly been
decentralized, but now in
sectors where it was not so,
are also facing pressures to
follow decentralization.
Industrial Relations Policy in India
• Some industries are cutting employment
to a significant extent to cope with the
domestic and foreign competition e.g.
pharmaceuticals. On the other hand, in
other industries where the demand for
employment is increasing are
experiencing employment growths.
Industrial Relations Policy in India
• In the expansionary economy there is a clear shortage of managers and skilled labor.
• The number of local and enterprise level unions has increased and there is a significant reduction in the influence of the unions.
Industrial Relations Policy in India
• Under pressure some unions and federations are putting up a united front e.g. banking.
• Another trend is that the employers have started to push for internal unions i.e. no outside affiliation.
Industrial Relations Policy in India
• HR policies and forms of work are emerging that include, especially in multi-national companies, multi-skills, variable compensation, job rotation etc. These new policies are difficult to implement in place of old practices as the institutional set up still needs to be changed.
Industrial Relations Policy in India
• HRM is seen as a key component of business strategy.
• Training and skill development is also receiving attention in a number of industries, especially banking and information technology.